Beijing looks for local focus when choosing foreign fund managers

The latest annual report on China's six-year-old Qualified Foreign Institutional Investor scheme, to be published this week by Shanghai-based research group Z-Ben Advisors, predicts that the programme's “fluid experiment” will continue to expand over the next few years until the quotas allocated, which are currently about $11bn, reach $30bn by 2014.

Foreign participation in China's stock markets is limited by the country's capital controls.

The QFII scheme follows similar programmes in South Korea, Brazil and Taiwan, where stock markets had grown rapidly but were plagued by volatility thanks to the inexperience of domestic investors.

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